Study Objectives: 1. To examine the possibility of using genetically modified crops as a rating variable in determining crop insurance premiums, 2. Specifically examine the yields of canola producers in the Province of Manitoba, Canada, 3. As non-GM canola becomes more popular as a crop for export and niche markets, this becomes an important distinction to make.
Behavioral lab experiments have uncovered a wealth of evidence that people do not approach risk in accord with economics’ workhorse theory of “expected utility”. For example, found that demand tripled with ’simple’ contract reformulation in Peru that should not have mattered from a standard expected utility perspective.
1. Weather based insurance (WBI) is better suited to cope with asymmetric information problems. 2.Launch of first WBI pilots in India and Morocco in the early 2000s. 3. Most of WBI contracts are designed to provide coverage against risk of drought. 4. Rationale: to promote adoption of higher income but riskier technologies. 5. Low participation […]
There is ample empirical evidence that traditional crop insurance does not attract high participation of producers without financial subsidies. In the U.S., for example, more than 60% of the total premiums paid by farmers are subsidized. In total, costs for the federal crop insurance program add up to $10 billion annually.
Restrictive irrigation water policies established due to e.g. environmental concerns or water scarcity appear to result in declining farm income and arising risk exposure in terms of yield uncertainty. In order to mitigate the economic disadvantages caused by restrictive water and irrigation policies, farmers may reallocate the available irrigation water between crops, adjust the crop-specific irrigation intensity or alter crop portfolios to better balance risks.
Regulations that restrict price competition in product markets often result in other forms of competition among firms and, in markets where rents are available, the reallocation of those rents to suppliers of relatively scarce inputs. Firms and input suppliers will also use some of the rents in a search for market power and seek to capture industry regulators.
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